On April 11th 2019, Blockstack filed an offering statement with the U.S. Securities and Exchange Commission (SEC) to conduct a Reg A+ $50 million tokenized offering. If approved, the offering is expected to be the first time “a blockchain project receives approval to access the public U.S. securities market”.
Details of Blockstack’s SEC-Regulated Token Offering Explained
Blockstack has turned to the SEC to raise $50 million through a compliant tokenized offering.
The funds raised will be used to accelerate the development of its current decentralized computing stack along with its larger application ecosystem.
Blockstack CEO Muneeb Ali released the news via Twitter saying,
“After rounds of private comments, we’ve publicly filed for a $50M token offering with the SEC. Upon qualification, our network and the Stacks tokens will be available to retail investors, including the US.”
Ali went on to describe the regulatory certainty as a primary reason behind turning to the Reg A+ tokenized offering:
“Recently, U.S. markets have been closed to crypto projects given regulatory uncertainty, and we believe in opening the U.S. market to innovation in this area. We’ve been working with securities lawyers to create a legal framework that can enable blockchain protocols to comply with SEC regulations. Our framework is consistent with the latest SEC guidance released last week.”
He also believes the offering will be a first of its kind, setting a blueprint for others to follow.
“Upon qualification, we believe that this offering may be the first time a blockchain project receives approval to access the public U.S. securities markets. This can potentially set a precedent for others in the industry, not just for public offerings, but also as a path to launch new public blockchains and establish a path to bootstrapping decentralized ecosystems.”
Blockstack and the Clear Regulatory Requirements for Security Tokens Explained
Formed by two Princeton students in 2013, Blockstack was conceived as a decentralized network to challenge the centralized system of the internet.
In 2017, Blockstack had a successful SEC Regulation D funding round, raising $52 million from investors such as Union Square Ventures, Y Combinator, Lux Capital, and Naval Ravikant.
Now, more than 80 applications exist on Blockstack, to include Graphite, a decentralized Google Docs alternative, Sigle, and BitPatron.
The core technology of Blockstock is open-source and contains a community of more than 7,000 individuals.
Blockstack is following the current blockchain transition of leaving the Initial Coin Offering (ICO) behind, and turning to a tokenized offering instead.
While ICOs are currently raising 58 times less than they did at this time last year, regulated tokenized offerings have seen a 130% increase as of late.
For more on the overall functionality of SEC-compliant tokenized offerings, be sure to review our comprehensive security token guide.
What do you think of Blockstack’s filing of an offering statement to launch a Reg A+ $50 million tokenized offering? Will the request see SEC approval? We want to know what you think in the comments section below.
Image courtesy of Blockstack.